As the world races toward ambitious net zero targets, the adoption of renewable energy has never been more critical. Governments, industries, and communities are ramping up efforts to reduce carbon emissions and stop climate change by transitioning to cleaner energy sources like wind, solar power, and hydropower. But despite the undeniable momentum, the uptake among businesses is still behind what it needs to be.

And there is one obstacle that stands out above the rest: cost. Our recent research shows that 50% of business owners still believe renewable energy is more expensive than fossil fuels.

But does renewable power really have to cost more? Increasingly, the answer is no—yet the reality is more complex. While renewable resources like the wind and sun come at no charge, hidden barriers—financial, logistical, and regulatory—are holding businesses back from realising the true low cost of clean energy.

Here, we’ll explain why renewable energy is, in fact, cheaper, examine why so many businesses are still reluctant to make the switch and outline the steps needed to break down these barriers and unlock a more affordable, sustainable energy future.

The myth: renewable energy is expensive

While the intention to adopt renewable energy is there, the perceived high cost is preventing many businesses from making the move.

Our research found that over half of all UK business owners (52%) believe that transitioning to cleaner energy sources would increase their bills. And this makes sense given that 69% believe that renewable energy should cost the same or more than fossil fuels. 

One of the main reasons clean energy appears so expensive is that most renewable energy is purchased through a centralised wholesale market, where it is bundled with fossil fuels and stacked high with middlemen and additional fees.

Instead of passing straight from generators to end users, the energy is traded along a chain of middlemen, such as utility providers and energy trading desks — each taking a cut through transaction fees. This adds up significantly and is why businesses end up paying considerably more for renewable energy than what it costs to produce. 

What’s more, for businesses to claim they are using 100% renewable energy, they need to pay their way with a certificate. These Renewable Energy Guarantee of Origin (REGO) certificates allow businesses to offset their energy usage with renewable production – a practice that underpins most ‘green tariffs’ today. However, the cost of this is typically added as a premium to their monthly energy bills.

The way renewable energy is bought and sold today creates the illusion that it’s a premium, high-cost alternative to fossil fuels, but this is far from reality.

The reality: renewables are cheaper

When you think about it, renewable energy sources are inherently free — after all, no one owns the wind or the sun! So, how can we unlock the true low cost of renewable energy?

Today’s energy market setup keeps a renewable electron coupled with a fossil fuel one, essentially lumping clean and dirty energy into one big lucky dip. This system masks the true low-cost of renewables, inflating energy prices through layers of middlemen. But without the inefficiencies of the wholesale market, the nominal cost of the renewable electron could be a fraction of the cost of a fossil fuel one.

This is preventing individuals or small businesses from directly transacting with low-carbon energy producers – which would not only be cleaner, but cheaper. Business owners too often feel backed into a corner, having to prioritise either cashflow or clean energy, without understanding that the latter can improve the former. 

Take away the layers of intermediaries that drive up costs, and decouple renewables from the fossil-heavy energy mix, and we can start to see a clear, true picture of what it costs to use renewable energy.

Enter: Renewable Energy Direct

The tools for creating a cheaper, fairer energy system are already in our hands. With advances in technology, a growing renewable sector and homegrown innovation, the cost of clean energy production keeps falling. But for businesses to actually see these savings, we need fundamental change in how energy is bought and sold.

In reality, a system designed when oil and gas were the most common forms of power generation – and that has remained unchanged for over 40 years – is just simply no longer the answer. 

The only way to make renewable energy truly accessible is with energy sovereignty – generating power on and around our shores that is owned by our communities and decoupling it from the outdated wholesale markets where prices are set by fossil fuels.

That’s why at tem. we’ve built a whole new system for business energy transactions. Renewable Energy Direct (RED) is tem.’s alternative to buying and selling through the wholesale market, enabling businesses to buy their renewable energy directly from renewable generators, cut out hefty transaction fees and see big savings on their bills. 

RED makes it possible to have complete traceability of the energy transaction, allowing businesses to see exactly how much of their energy purchased is renewable. At the other end, RED also puts more money back into the pockets of the renewable generators, incentivising investment in the sector and powering the energy transition.

Power on RED today

Renewable Energy Direct (RED) is the cost-effective, traceable, smartest way for businesses to buy renewable energy. Get started here today.